Feeds

EE's revenues dip, but smartphones lure in 200k new contracts

4G not the promised goldmine, though

3 Big data security analytics techniques

UK telecoms giant EE's first annual results are in, showing cost savings and revenue growth wiped out by regulatory changes, but customer numbers are up - even if it's not 4G that's attracting them.

The UK's biggest network operator posted full-year earnings of £1.41bn for 2012 before the numbers for tax and depreciation (EBITDA) on revenues of £6.65bn pounds, but that wasn't quite enough to make a profit. Instead EE saw an overall loss of £249m, despite adding 201,000 contract customers, increasing revenue, and cutting costs, because regulatory changes - notably the cut in mobile termination rates - cost it dearly.

Take those changes out and revenues would be up 2.7 per cent compared to 2011.

But it does seem that EE is positioned well for 2013, as 4G is attracting customers and 4G customers pay an average of 10 per cent more for their contracts. The company also said that its 4G monopoly has paid off to some extent. Quite how much it won't say - there aren't any numbers for 4G subscribers. EE says that's to prevent interference with the ongoing auction, but as industry analysts at Ovum point out:

If customer uptake was far ahead of expectation, then we would hear about it. We therefore have to conclude that uptake has not been spectacular.

The analysts also noted that EE's premium pricing of 4G is unique in developed markets. Neither Japan, South Korea nor the USA charge significantly extra for LTE services - but then none of those countries gave a single operator quite such a monopoly as EE achieved in the UK.

EE was formed by the merger of Orange and T-Mobile, so has been busy switching off 2,659 cell sites (duplicates, one would hope) and closing stores (78 to be shuttered, some still in progress) so the savings are on track and operational costs should continue to decline.

Churn is very low, 1.4 per cent, and more than half of EE's customers are on contracts these days, which increases loyalty and Average Revenue Per User (ARPU) too. That ARPU is, however, still coming from voice services. EE is justifiably proud that "non-voice revenue" now makes up 50 per cent, but look a little closer and one sees that SMS is still important as data only makes up 34 per cent of what customers pay.

EE has successfully launched a new brand, rolled out a working 4G network and increased both revenue and customer numbers, but it hasn't really exploited the 4G monopoly as many had expected it would. Like the rest of the industry, it appears to still be clinging to a world of voice and text services which is slowly disappearing. ®

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.